Tether (USDT) Review

How Tether scores in stablecoins

This entry rates Tether (USDT) in our stablecoin ranking. The contracting party in Tether's terms of service (last updated February 26, 2026) is Tether International, S.A. de C.V., which the terms say redomiciled from the British Virgin Islands to El Salvador; the terms remain governed by British Virgin Islands law. The basis is desk research of Tether's terms, fee page and transparency page, and its Q3 2026 reserve release of October 30, 2026, checked on November 1, 2026. No account was opened and no tokens were bought or redeemed. The category uses five equally weighted criteria, each marked 0 to 10, as set out in our ratings methodology.

The overall score is the plain average: (6 + 5 + 5 + 4 + 7) ÷ 5 = 27 ÷ 5 = 5.4. The previous overall was 5.2.

One mark changed on November 1, 2026. Regulatory oversight rose from 4 to 5 after Tether's terms of service began naming an authorisation as a stablecoin issuer in El Salvador under CNAD oversight; the earlier entry found no supervisor named for the issuer. The other four marks are unchanged.

Strongest criterion: backing model clarity (7)

Tether's Q3 release reports $132.4 billion of direct and indirect US Treasury bill exposure against $191.45 billion of total assets, about 69%, and an excess of $7.95 billion of assets over liabilities. The terms state plainly that the reserve can also include loan receivables and assets from related group companies, and earlier releases reported gold and secured lending. Saying so is what earns the 7: a reader can see that the reserve is not cash and bills alone. It is not higher because the latest release does not give the remaining roughly 31% by category, so how much sits in loans, gold or other assets at September 30 cannot be read from it. Those assets behave differently from Treasury bills: gold's dollar value moves with its price, and a loan depends on the borrower.

Middle marks: transparency, oversight and redemption

Reserve transparency (6)

Tether names its attesting firm, BDO, and publishes circulation figures typically every day. The limit is cadence: attestations are quarterly, while the issuers that score 9 or 10 here attest monthly. The transparency page itself shows no assets, liabilities or composition in its text, and the figures above come from the quarterly release. An attestation reports balances at one date; it is not a full audit.

Regulatory oversight (5)

The terms now name a supervisor for the issuer: CNAD in El Salvador, under which Tether says it holds stablecoin issuer and service provider authorisations. That closes the gap the old entry recorded, and the mark rises by one point. It stays at 5 because this is Tether's own statement, CNAD's register was not checked, and the regime's reserve and capital rules were not assessed. Issuers under New York or federal US charters score 9 or 10. USA₮, a separate token Tether supports in the US, is issued by Anchorage Digital Bank and is not covered by this rating.

Redemption rights (5)

Tether publishes its redemption terms in full, which keeps the mark at the middle of the scale. Those terms are wholesale: a holder must be a verified customer, pay a $150 verification fee and redeem at least $100,000. On a $500,000 redemption the fee is $1,000, because 0.1% ($500) is below the $1,000 floor. Tether's terms also exclude US, Canadian and Singaporean persons, with exceptions, so most holders rely on exchange markets rather than redemption.

Weakest criterion: custody and segregation (4)

This is an adverse finding in the terms, not only a missing disclosure. Tether's terms say that a holder's property is not segregated or held for the holder's benefit, and they do not say how the reserve would be treated if the issuer failed. No custodian bank is named on the terms, transparency page or Q3 release. Issuers that name a custodian and state segregation score 9 here.

What the score does not cover

• Market size and liquidity. Tether's supply and trading depth are not criteria.
• Enforcement history. The 2021 New York Attorney General settlement and CFTC order concerned past reserve statements. They are part of the record but are not scored as a separate criterion.
• Freezing. The terms allow Tether to freeze or seize tokens and blacklist addresses. This is common among issuers and is not scored.
• Networks. Which chains carry USDT and the end of redemptions on discontinued chains were not measured.

Our guide on how to assess a stablecoin explains how to read attestations and redemption terms.

Tether vs Sky USDS and First Digital USD

Sky USDS averages 5.2 after its November 1 recheck, so Tether now sits just above it. Tether scores higher on oversight (5 against 3) and backing clarity (7 against 6), and lower on redemption (5 against 6) and custody (4 against 5). First Digital USD averages 6.6 after its own recheck. It leads Tether on custody (7 against 4), for reserves held in segregated accounts by a Hong Kong trust company, and on transparency (8), redemption (6) and backing clarity (8), but trails on oversight (4 against 5). Fiat-reserve issuers with US charters, such as USD Coin at 9.0, sit higher again, mainly on custody, cadence and oversight.

Who this rating suits

The score describes the most widely held stablecoin with a named auditor and a named, if lightly documented, supervisor, but quarterly reporting and no segregation of reserves for holders. It is most relevant to traders who use USDT for its liquidity and understand they depend on exchange markets rather than redemption. It is less suited to anyone who wants a legal claim on segregated reserves. The score assesses published documentation and is not a recommendation to hold any token.